Abstract: Cultivating and upgrading core competence of enterprises is an urgent issue to be tackled in petroleum and petrochemical industries in China. Core competence is the exclusive ability of an enterprise that can bring about competent advantages and is the origin of competence of an enterprise. Combining with the status of petroleum production enterprises in China, fundamental elements that constitute the core competence are analyzed. The ways and methods for cultivating and upgrading core competence of petroleum production enterprises in China are presented.